Netflix, Inc. (NASDAQ:NFLX) reported its fourth quarter earnings on Wednesday and discussed the following topics in its earnings conference call. The following questions had been submitted via email to Netflix’s Investor Relation’s department prior to the call.

56-Day Release Window

Ellie Mertz – VP, Finance and IR asked: How do you think consumers will react to a 56-day new release window? Do you expect that to drive more consumers away from DVD subscription?

Hastings responded: Our DVD consumers including hybrid and DVD-only continue to be weighted towards catalog. It’s less than 30 percent in terms of the shipment mix that are new release oriented.

When we went to 28-day we didn’t see a big shift because again that mix was about the same thing. And it’s actually gone slightly down. It hasn’t gone slightly up as you might surmise from concentration to DVD subscribers.

Additions to Product Offerings

Mertz asked: Will you be adding video events or 3D movies to your product offerings especially since subscribers are willing to pay a premium like they do for Blu-ray?

Reed Hastings – Founder and CEO: 3D movies, we already have. We have a lot of Blu-ray that’s on 3D, and on the streaming, that’s definitely something we can do and we’ll be looking at. In terms of video games, we have no plans to enter them.
Subscription Costs

Mertz asked: How should we think about subscription costs as a percent of revenue for 2012 and longer term?

Hastings responded: Well that will vary by market and maturity as is contribution margin and contribution profit. And as we talked about, we did better in the fourth quarter than we expected so we are taking up our target 11 percent for quarter one for contribution margin in the U.S.

In our different international markets, our contribution margin is still negative. The losses will abate in each market as it grows, making the contribution margin positive.